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Another piece of software you mind find yourself using fairly frequently is a spreadsheet application. I currently have Microsoft Excel open. It's arguably the most popular and well-known spreadsheet program out there. Apple also has a spreadsheet program called Numbers, which is part of their iWork Suite of Applications. At its most basic level, a spreadsheet is the electronic equivalent of a paper ledger sheet. Like ledgers, spreadsheets are comprised of a grid of rows and columns, and can be used for balancing your checkbook, calculating loans, managing the addresses and contact information of customers, and so on.
One of the advantages of spreadsheet programs is that they can quickly perform complex calculations once you've set them up to do so. For example, here in Excel, I'm going to choose File > Project Gallery, to browse through some of the pre-made templates and spreadsheets in Excel. I'm going to go into Home Essentials > Finance tools, and in here, I'm going to select the Standard Loan Analysis, and click Open. Expand the window a bit, and I'm going to increase the magnification, so we can see this a little bit better.
So this is a pre-made worksheet to help you figure out how much a loan will end up costing you. In this case, all you have to do is plug in your own numbers under this Analysis area on the right. So for instance, maybe I'm looking at a loan amount of say $75,000, at a rate of 3.9%, and we'll keep it over 3 years, and we'll say that the loan starts on October 1. Let's make that 2010. As you probably noticed, as I typed each value, the entire worksheet updates itself to reflect the numbers I've entered.
This is a great way to see how much your monthly payments will be at various interest rates, and how much you'll end up paying over the life of the loan. In this case, it's calculated that I'm going to pay about $4,500 in finance charges, to a total cost of $79,594.71. Now, this is a highly formatted and stylized spreadsheet. In many cases, you probably won't create something just to elaborate for yourself, but let's use this Amortization Table down here, and we'll go over some basic terminology concerning spreadsheets. Now, as I mentioned, in a spreadsheet, you have columns and rows.
Columns are vertical. These are columns here. And they're designated by letters, as you see going across the top of the spreadsheet. So what happens if you run out of letters for columns? Well, if you have more than 26 columns, they're designated with double letters then. So after you hit Z, the next columns will be AA, BB, CC, and so on. Usually though, you'll create your own more meaningful headers for your columns, like we have in this worksheet, like Payment Date, Beginning Balance, Interest, Principle, and so on. Now, rows are horizontal, and they're designated by numbers.
In this case, the rows are used to show the data for each monthly payment on the loan. Now, the point where rows and columns meet are called cells. Cells are referred to according to their column letter and row number. So this particular cell I just clicked is cell F28, and this one here is G38. It's the cells into which you enter your data. The data you enter into the cells can be numbers, letters, special characters, or any combination of those, or the cells can automatically populate themselves if you apply formulas to them.
That's pretty much how the cells in this particular table work. Their contents are automatically determined and updated based on the numbers you enter into the yellow cells at the top of the worksheet. So if this became a $60,000 loan, you could change that. You can see all the other cells in here have updated themselves. Okay. So that's a brief introduction to what spreadsheets are, and what they can be used for.
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